DELHI- A senior official has indicated that the Indian government intends to pursue the sale of its shares in Air India’s (AI) former subsidiaries in the fiscal year 2025 (FY2025). However, the privatization of the Container Corporation of India is not anticipated to gain momentum in the near future.
“The disinvestment of Air India subsidiaries is feasible and remains part of the ongoing pipeline,” stated Tuhin Kanta Pandey, Secretary of the Department of Investment and Public Asset Management, during an interaction on Sunday.
Air India Subsidiaries Stake Sale
Air India subsidiaries encompass Air India Air Transport Services Ltd (AIATSL), Airline Allied Services Ltd (AASL) or Alliance Air (9I), Air India Engineering Services Ltd (AIESL), and Hotel Corporation of India Ltd (HCI).
These entities are under the ownership of Air India Assets Holding Ltd, a special purpose vehicle established in 2019 to manage the non-core assets and debt of Air India.
Roadshows have been conducted for the divestment of AIESL, the country’s largest maintenance, repair, and overhaul company, and last year, approval was received from a group of ministers to initiate the process. A
Although the divestment of Alliance Air is also underway, the government has yet to solicit expressions of interest for any of these companies.
Challenges Ahead of Privatisation
The Cabinet approved the divestment of all subsidiaries in 2017, aiming to raise around ₹3,000 crore from the sale of engineering and ground handling companies.
However, as of now, the initiation of the process to seek interest for any of these companies is pending, despite Air India being fully acquired by the Tata Group for approximately ₹18,000 crore in 2021.
Regarding Container Corporation of India (Concor), there is no clarity on whether the process will commence in the upcoming financial year. In 2019, the Union Cabinet approved the sale of 31% of the government’s total shareholding (54.8%) along with the transfer of management control.
Tuhin Kanta Pandey, when questioned about the government’s plan for soliciting expressions of interest, expressed uncertainty, stating, “I’m not too sure whether we can start the process in FY25. It certainly can’t be concluded within the same financial year.”
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